Foreclosure prevention scam stopped by California authorities

By Jack, on August 19th, 2011

Tens of thousands of people in several states who were threatened with foreclosure picked up their mail to find a letter that looked like a class action lawsuit notification telling them that they were potential plaintiffs in a litigation settlement. According to the Associated Press, these letters “…claimed [that recipients] could cut their mortgage to as little as 70% of their value, prevent foreclosure and get $75,000 in damages.”

Prosecutors in California claim that these claims were fraudulent, but that hundreds, or even thousands of people paid from $5,000 to $10,000 to join these suits. They have filed charges against several law firms and individuals.

According to the FTC these people are not alone. Complaints about foreclosure prevention and credit repair scams have been multiplying.

Don’t fall for these scams. If you are in danger of foreclosure, help is readily available for free from government approved counselors. Information on how to find one to help you is available in our previous post on Never Paying an Upfront Fee for Foreclosure Prevention.